Why Ethereum Price Is About to Explode According to This Indicator

Sentiment around Ethereum needs a small increase to confirm an indicator that points to a significant price increase. That is the conclusion of CryptoQuant analyst Burak Kesmeci. “We are waiting for Ether’s funding rate to rise above 0.015 to see if the calm of the storm breaks,” Kesmeci said.

Ethereum needs positive signals

A higher funding rate signals a bullish market and indicates that traders are willing to spend more to open long positions. “To see a new parabolic rise in Ethereum, we need positive signals. The support of the futures market plays a significant role in such rises,” Kesmeci added.

Ethereum’s current funding rate is around 0.0056%, which is comparable to the level of September 2023, just before it broke above 0.015.

According to Kesmeci, it is crucial that Ethereum’s funding rate moves back to this level. “That is crucial for following healthy increases during bull markets,” he says.

Following a funding rate surge in September 2023, Ethereum’s price shot up 166% over six months, hitting the 4,006 level on March 13, 2024.

Ethereum price stagnates

Recently, however, Ethereum has been in trouble. It has not been able to close above $2,500. With that, Ethereum is also starting to lose ground to Bitcoin. The Spot Ethereum ETFs have also not yet brought what the market hoped for.

Futures traders also seem to doubt that Ethereum can reach this level ($2,500) again in the short term. If it does? That would mean $576.28 million worth of shorts would be liquidated, according to data from CoinGlass.

Ethereum reached its provisional all-time high of 4,810 in September 2021. Data from Tradingview shows that Ethereum’s dominance was also much higher at that time. At the time, it was 17.98%.

Now Ethereum has to make do with a dominance of 14.20%. With that, it has been losing ground to the rest of the crypto market for some time. And of course especially to Bitcoin, which is still by far the largest.